CBA's focus on profits was an 'imbalance,' its chairman concedes

Commonwealth Bank chairman Catherine Livingstone has conceded there was an "imbalance' in the bank, which resulted in a focus on profitability that left some of its customers worse off.

After a tumultuous year for the country's biggest bank, Ms Livingstone told shareholders on Wednesday that the royal commission into financial misconduct had raised questions about "competency, complacency and priorities" within CBA.

CBA also said its cash profit was about $2.5 billion in the September quarter as charges for bad debts stayed at historic lows - a result that was slightly ahead of market expectations.

CBA chairman Catherine Livingstone.Credit:Louise Kennerley

In a meeting that lasted almost three hours and was dominated by questions focusing on the banks' fall from grace in recent years, Ms Livingstone said there had been failings in the bank's systems, it did not act quickly enough to address problems, and it focused too much on profitability.

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"When people or processes failed, there were neither the systems nor processes in place to identify and fix the problems, nor a sufficient sense of urgency to identify the root cause, and take steps to preventsimilar issues arising again," Ms Livingstone said at CBA's annual general meeting in Brisbane.

"Our focus on improving overall customer satisfaction also obscured and distracted us from focusing on customer dissatisfaction, which would have alerted us to many of these issues sooner.

"We also acknowledge the royal commission’s criticism that, too often, a focus on profitability disadvantaged some of our customers. We agree that this imbalance is not acceptable."

At the meeting, Ms Livingstone faced repeated questions focusing on misconduct, including from some customers who said they were victims, and the incentives provided to staff.

Ms Livingstone and chief executive Matt Comyn promised to meet with some of the customers after the meeting, and said the bank had overhauled how it dealt with customer complaints.

During the last year, CBA has paid a record $700 million fine over a money laundering compliance scandal. It's seen the royal commission expose a list of failings in its wealth management arm, including charging advice fees to dead clients, and it settled a case alleging interest rate rigging.

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Ms Livingstone said there was "much to be done" to deal with the failings uncovered by the Hayne royal commission, and outlined changes already made by the bank.

In the past six years, Ms Livingstone said, CBA had paid $270 million in compensation to customers who received dud advice or were charged fees for services never provided. She also said it had spent $580 million overhauling and improving its financial advice businesses.

Proxy votes displayed at the meeting showed 93 per cent of large shareholders had supported the remuneration report, and 95 per cent voted in favour of a granting shares to Mr Comyn as a long-term incentive.

Senior executives have copped a $100 million reduction in their pay over the last two financial years, which have also seen a money laundering compliance scandal and a scathing inquiry into CBA's governance and culture by the Australian Prudential Regulation Authority.

Mr Comyn, who will appear before the royal commission in Sydney this month, highlighted the bank's strategy of simplifying the company and focusing more closely on retail and business banking as it sells out of the wealth management sector. He said the core priorities were "to better serve our customers and to earn the trust of the community".

CBA's $2.5 billion in unaudited first quarter earnings is 5.6 per cent less than the $2.65 billion CBA made in the same quarter last year, but an 11 per cent increase on the quarterly average of the six months to June 2018, or a 3 per cent rise excluding one-offs.